You're a bit fuzzy on the dates, but when you defaulted on the loan back in the 1990's, the old 6 year limitation period applied. You may or may not have needlessly renewed it in circa 2002 when you repaid them. You probably didn't since likely more than 6 years had elapsed.

Which begs the question: How were they able to garnish your account in 2002 unless they took you to court and obtained a judgement against you? Unless it was a collection agency who was acting with an outstanding certificate on behalf of a government agency. Back then, the 6 year limitation period would probably have been exceeded. Didn't the judge notice or did you not contest the claim?

Now they are bugging you again 5 years later. There's a new 2 year limitation period in Ontario for general unsecured consumer debt that came into effect on Jan. 1, 2004 for debts that were defaulted on after that date.

But since your debt is from a long time before that, the six year rule still applies, As well, it may be possible to keep grandfathering the limitation period for another 6 years every time you give them written acknowledgement of the debt.

And so while it's theoretically possible to have had it's limitation period renewed by what you did in 2002, my best guess is that I would simply tell them to see you in court if they think they have a case. Only try to do it over the phone this time. I bet it's 99.9% that they're bluffing you.

Without more specific info on dates, what the loan was, and what you might have done to acknowledge it, no one can tell you anything absolutely certain.

Ray

P.C.M Collections Limited (Thunder Bay) contacted me today for an "alleged debt" back in early/mid 1990s.
Back in 2002 (give/take a year) when I was working and trying to get credit, I agreed to pay monthly installments. My work ended (contract) and I could no longer pay. I had sent them post-dated cheques, but once my work ended, and the cheques ran out, they used that account information to garnish that account. I stopped using that credit union.
I wrote the collection agency to stop calling me.
Last year, I told all this to a friend, who told me that technically, I should never have sent them any money.
This is the only debt hanging in the background - I am not rich, still a single mother raising near teen age sons with deadbeat father. Since then, I do have credit cards, a substantial loan for the next 7 seven years (cabin) and that vehicle which I just finished paying off.
How do I deal with this situation today?

Hey Raymond,

The problem with judgements as I've seen was this:
The judgement is listed incorrectly, with errors on a credit report. By definition Equifax, TransUnion has to deal with these and either fix it or delete it.

The credit repair law doesn't give a deadline for the credit bureaus to fix anything. They have a "reasonable" amount of time to fix the error on a person's credit report.

So, they usually take whatever time is "necessary" and go and fix the data entry error.

As such I had the worst time trying to get things deleted from peoples credit reports.

The point is... I"ve seen many many bankruptcy listings, judgement listings that were erroneous.

EXAMPLE: On several bankruptcy listings, I've seen it where the issuing court for the bankruptcy was either small claims court or provincial court. Do the small claims court really issue bankruptcies? :)

Anyway... just thought I would jump in for a second.

When you refer to collection agents as "life forms," you may be correct as long as you don't mean "human life forms."

Judgements are entered on credit reports for 6 years from the date of judgement, not from the date you last made a payment on it, if there is one.

Almost certainly, both of the 2 main credit reporting agencies - Equifax in Montreal and TransUnion in Hamilton - will have a lot of errors on your file, and so any judgement and its amount may or may not be on one or both. You need to check by ordering a free copy from both CRA's. Don't be afraid to do so as none of your creditors can do anything more to you at this point.

I think you are making a couple of mistakes. It would be a good idea for your creditors to know where you live, not a bad one. That way, if they try to take you to court and get a default judgement against you, they won't be able to to. In your case, you want them to know where you live so you can defend against any stats barred action they try and sneek through. When you get a place to live, call them up and tell them you know all your consumer accounts are stats barred, though many or most will try to deny it.

As far as your income tax goes, there is no limitation period on it; but you need to contact the CCRA. Under the "Fairness Legislation Act," request that (becuse of your circumstances), all interest and penalties be dropped on the $8000 or so that you owe. Then, when and if you earn a little more income at some future time, you can start paying off the principal at 50 or 100 bucks a month - or whatever. Alternatively, you could simply let your income tax and GST refunds gradually whittle the outstanding principal down. And so declaring bankruptcy for these reasons and the previous ones listed makes no sense at all in your situation.

Revenue Canada is probably the only enforceable debt you owe unless there has been a past judgement rendered against you. In regard to this, don't be afraid to go to your local small claims court office and have them run a check against your name. If there is one, you want to know about it; if there isn't, you want your worries relieved.

Bankruptcy, as I mentioned, would cost about $1600, payable in monthly installments, and ruin your credit for up to 8 additional years from the date of fiiling, whereas the negative items on your file should be cleared off in a bit more than 3 years without you having to do anything. Why shoot yourself in the foot?

Ray

In turn Ray, my apologies for the delay in responding to your excellent information, and humour. I have been busy job hunting. Thank you for communicating with me as a human being, rather than a (fill in negative debtor description of choice).

Thanks for the ANSI info: No worries, I won?t be calling the ?collection agencies? from the phone here?.or the phone box down the road.

I have one question, which will follow my answers to a couple of items you posed to me:

First, just so you know re: potential employers requesting credit info (in addition to background) I think the reason my credit rating got involved was simply because of the responsibility level I was applying to; none of which were in banking or insurance. I am not now, nor ever have been, nor have even entertained being a collection agency, hyena, or jackal (or my favourite description for them: single cell life forms in the shallow end of the gene pool.)

I am suspecting the last bank I had an account with was the source of the ?leak? to the skip tracers, as this is the ONLY place that had the address, and I understand that tracers actually cultivate/place contacts in these (and other) places. Given that banks are under the federal PIPEDA (in my view, more teeth than provincial equivalent) I only wish I could prove it. Any ideas? I have great research skills, and some legal training to boot. Also willing to help this site a bit too if interested.

Unfortunately, bankruptcy has appeal to me at this point because the opportunities I am currently applying to are C$8 ? 10 hr, less than half of the rate I was at when I got laid off. I?m looking at about $100- 150 dollars a month after BASICS (rent, food, bus fare, and the occasional used book) to apply towards outstanding debt. To my rough calculations, this could mean five to twelve years to pay everything off. However, I am certainly going to do a bunch of research on consumer proposals once I finish this post.

Now, my question?. Would my credit report list any judgements against me? I would prefer not to have to ?alert? anyone by going into a Small Claims court to have them run a search, especially as I am not yet employed. I can get this run by someone whom I implicitly trust.

I truly feel I can deal with my situation, given the wellspring of good information/education that you, Monty, and so many others have taken the time to write up on this site. Absolutely phenomenal job, and very much appreciated!!!

My apologies, I shouldn't have referred to all collection agents as collection agencies. Some are hyenas and jackals. I apologize for any misunderstanding this may have caused.

I don't know how they knew the address you are staying at; in fact, maybe they don't. A lot of agencies will have their skip tracers contact people that debtors may have used on old bank accounts or loan applications as a contact - that's why they have that question on the form. They may have called one or more of them looking for you and were given a couple of places to try. When agencies do this, they mail out notices to several locations in the hope of getting lucky.

Then if you call the collection agency from that location, they have software such as Automatic Number Recognition (ANI) ) - like 911 services have - to capture the sending number and start hounding you there. ANI also defeats call blocking and call screening, so if you decide to call the collection agency back, do it from a payphone - preferably not one across the street from where you live. Be also advised, that for significant amounts, the original creditor, if they haven't sold the debt, may rotate it to as many as 8 or 9 agencies. "Persistence wears down resistance," as Deanna Natale used to say.

As far as your debts go, except for CCRA and student loans, the consumer debts you owe would be stats barred from legal action if they went into default (or the lender should have known there was a default) after Jan. 1, 2004, they were taken out in Ontario and the lender hasn't filed an action yet. Again, this doesn't mean that they still can't harass you for the money, just that they have no legal remedy for recovery.

As to what you should do, no one can tell you that. However, in making your decision, it's obvious that you have bigger issues than simply owing a few bills. You need to get a job that pays you a decent living wage.

By the way, even though private creditors can't sue you, it's not the same situation with federal and provincial governments. As soon as you start working, they could (possibly) issue a certificate for what you owe them and present that to a small claims court in lieu of a judgement, and from that, garnish your wages up to a max of around 15%. They can't do that with CPP and Ontario Works etc though.

It's hard to see how having a bad credit report will keep you from the majority of jobs out there, unless you want to work for a bank or (god forbid), a collection agency.

Thus, if the taxman is the only one you legally owe, and all or most of your other creditors are stats barred, AND you are not going to declare bankruptcy (why would you for $8,000), it would be a good idea, once you have some source of income, to try and make some easy payment arrangements with them. [With the government, there's no place to run, no place to hide.]

It's up to you, but I wouldn't waste my time and money with a debt settler when you can just as easily do it yourself. Credit proposals are ok, if you've got a source of income and intend to pay off all your debts (as it stops further interest from accumulating). But this doesn't apply to you right now since you're not working.

With respect to bankruptcy, it would be a shame if you had to declare it, not because of shame and all that stuff, but because the amount would be so small and it would cost you about $1600.00 in monthly payments anyhow. Further, it would stay on your credit report for 7 years after the date of discharge, not the date of filing. That would be effectrively 8 years in total, whereas now, the negative stuff will go off your credit report in circa 3 1/2 years. People write in to say that they've re-established their credit after bankruptcy in a shorter period of time; however, they're generally saddled with onerously high interest rates for things like car loans and mortgages for quite a while.

As an aside: it seems a pity so many people feel they have to declare bankruptcy each year for what are relatively small amounts of money. Last year, for example, in the Kitchener-Waterloo Area - the hottest growth area in Ontario right now - the average amount in default was only about 35K. It just goes to show how many people are living on the edge, even in prosperous times. What would it be like in a recession?

One final note. Since you have been lying "low," it's possible that one or more of your creditors may have served you with a claim by mail and delivered it to your last known address and then obtained a default judgement against you when you didn't respond. It would be a good idea to check with the local small claims court office in your area or the area where the accounts were opened, if different to see if any judgements have been issued against your name.

Ray

Thanks Ray -

I owe approximately 22,000, six creditors, and one is the gov't in tax assessment(their portion is just under a third of the above amount).

Allie

Before proceeding any further, how much money approximately do you owe and to how many sources?

Ray

Very informative site...completed a lot of reading before posting.

Some background, leading to my question: A collection agency has mailed a notice to the place I have been staying at . This is regarding an (unsecured consumer) debt that has neither been acknowledged or payment made upon by myself, since 3Q2004.

I don't have any assets (sold back over 2004 to try to pay other debts...) or a phone, or credit cards, or valid DL, or $, etc. (makes me wonder what databases they 'mined' to find me...) I do, however, have a very bad credit record, and as a result, no chance of decent employment to pay my debts off, and I suspect the other unpaid bills I left behind will be shortly catching up...

My question is how should I handle this notice? I understand from reviewing the revised Statute of Limitations (Ont. 2004) that this debt is outside of the 2 year limit. They stated the co. they had purchased the debt from, and several 'offers' I could 'take advantage' of. As I have no stable employment, there's no way I can undertake even their offer of paying x dollars a month (for the rest of my life?...the monthly terms were VERY vague)

I am very wary of approaching any credit counselling agencies, or trustees that promise a 'fresh start' (yeah, right!) with a bankruptcy filing. Like I can even afford that....

Interested in realistic procedures/approaches? Thanks....